U.S. Treasury yields were trading higher in early Thursday’s trade as investors grew more positive about the economy’s trajectory.
What are Treasurys doing?
The 10-year Treasury note yield
BX:TMUBMUSD10Y
rose 3.5 basis points to 1.656%, while the 2-year note rate
BX:TMUBMUSD02Y
was up 0.6 basis point to 0.172%. The 30-year bond yield
BX:TMUBMUSD30Y
added 2.8 basis points to 2.329%.
What’s driving Treasurys?
Federal Reserve Chairman Jerome Powell noted in Wednesday’s post-meeting news conference that U.S. economic data had strengthened, but reaffirmed his commitment to the central bank’s dovish policies. Equity futures and yields both rose in sync on Thursday.
See: Fed’s Powell ‘doesn’t blink,’ and 5 other things we learned from his press conference
Powell’s remarks comes ahead of the first official read of the U.S.’s economic performance from January to March. MarketWatch-polled analysts are forecasting a 6.5% increase in gross domestic product in the first quarter when the data is published at 8.30 a.m. Eastern.
In other data, weekly jobless benefit claims are due at 8:30 a.m., along with pending home sales for March at 10 a.m.
President Joe Biden unveiled his plans on Wednesday night to invest a combined $4 trillion in infrastructure and other priorities. But it’s unclear if Biden will be able to push the bills through Congress where a few dissenting votes from moderate Democrats could scupper a vote.
What did market participants say?
“We think higher rates should materialize as it will be increasingly difficult to turn a blind eye to the improving backdrop, especially in the US,” said Padhraic Garvey, regional head of research for the Americas at ING. “With US President Biden’s ambitious fiscal plans out in the open, and the Fed meeting behind us we see less reason for rates to defy the upward pull.”
